- Goldman Sachs plans to expand its crypto trading, lending, and tokenization initiatives.
- An executive believes that regulatory clarity is vital for institutional-scale adoption of crypto.
- The bank is spinning out its blockchain-based GS DAP platform to drive participation.
Goldman Sachs is making a bigger push into digital assets. The bank just unveiled plans to ramp up its crypto trading and invest more heavily in tokenization. That’s an industry already worth billions.
Speaking at TOKEN2049 in Dubai, Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, drove home the point about the bank’s deeper dive into the crypto world.
“We’re seeing more of our clients wanting to actively engage in digital assets,” McDermott told attendees while adding that the demand is pushing the investment firm to expand trading, lending, and tokenization initiatives “more aggressively.
Expanding Crypto Services
Goldman used to mostly just play in the digital asset secondary markets. This meant things like trading private equity and derivatives. Now, the bank plans to jump into crypto lending.
It also aims to check out tokenized products that clients can actually use in the real world.
Rules Are Key for Crypto to Grow Big
McDermott stressed that the next phase of growth hinges on one critical factor, i.e., regulatory clarity. Under former US President Joe Biden and former US SEC Chair Gary Gensler, the digital asset space has suffered due to lack of regulations.
Related: Goldman Sachs’ Blockchain Spin-off: A $10 Trillion Crypto Market Catalyst?
However, President Donald Trump has taken numerous pro-crypto initiatives to push for the adoption of digital assets and Bitcoin as the US’ first “crypto president.” McDermott spelled out why rules are key for getting big.
“To achieve scale, you need big institutions deploying capital across a cross-section of the market. Regulation is the key that unlocks that next level.
US Stablecoin Bills Might Help
If these bills provide banks and financial institutions with clear, secure paths to adopt stablecoins, it could trigger a massive leap in adoption and utility. According to the executive, a stablecoin regulation could “accelerate the use of digital currency by big players.”
It is important to note that Trump’s very own World Liberty Finance (WLF) debuted a stablecoin called USD1 in March on the Binance Smart Chain and Ethereum. The stablecoin hit mainstream headlines when it was used by UAE investment firm MGX purchased a $2 billion stake in Binance transacted entirely in USD1.
Related: Binance Lands $2 Billion From MGX, Deal Done Entirely in USD1 Stablecoin
Goldman’s Digital Platform Going Solo
Moreover, Goldman Sachs’ own digital asset system, called GS DAP, a blockchain-based system designed to reduce settlement times and streamline institutional trading, will be turned into a standalone entity.
The move aims to overcome institutional hesitancy about platforms controlled by direct competitors. In partnership with Tradeweb Markets, the new independent venture will seek to offer a commercially scalable infrastructure fit for a multi-bank ecosystem.
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